La. Admin. Code tit. 4 § XXI-1321
Current through Register Vol. 50, No. 11, November 20, 2024
Section XXI-1321 - Ensuring Minimum Financial CapabilityA.1. To submit a grant application, prospective subgrantees shall provide details to complete a review of financial capability, including but not limited to the following.a. Obtain the five years of financial statements, pro forma statements or financial audits submitted by each applicant or the financial statements for each year that the applicant has been in business if less than five years. Ensure that the complete financial statements were submitted. If financial statements are not available, search for the applicant's SEC Form 10-K filing. Using the audited financial statements, reviewed the unaudited financial statements for reasonableness. Review the financial statements, if audited, to determine if there is a going concern disclosure in the audit report.b. Determine whether the applicant's business status is active in Louisiana, whether the applicant has filed for bankruptcy, and whether the company is involved in any lawsuits.c. Determine the funding sources for the project.d. Review the balance sheet, statement of operations and statement of cash flows to determine if the applicant is steady and/or growing. Use EBITDA margin to assist in this analysis. Calculate the current ratio (current assets/current liabilities). Calculate the debt to assets ratio (total debts/total assets).2. Documentation related to the requirements above will be collected and reviewed by qualified personnel to ensure a clear plan for determination of participation is in place.B. Required Qualifications for Financial Obligations. The office will require prospective subgrantees to certify that they are qualified to meet the obligations associated with a project, that the prospective subgrantees will have available funds for all project costs that exceed the amount of the grant, and that they will comply with all requirements, including service milestones. Disbursement of funding to subgrantees after the initial 10 percent draw is only done upon completion of a technical and compliance audit at specific established thresholds of the number of locations served out of the total number to be served by a project (10 percent, 35 percent, 65 percent, 85 percent, 100 percent). Each subgrantee shall certify that it has and will continue to have sufficient financial resources to cover its eligible costs for the project until such time as the office authorizes additional disbursements.C. Required model letter of credit in accordance with related guidance from NTIA.D. For applicants obtaining a performance bond, the office will require applicants to follow all requirements and related guidance from NTIA including those specified in the limited waiver.E. Required Audited Financial Statements. Each prospective subgrantee shall submit financial statements from the prior fiscal year that are audited by an independent certified public accountant. If the prospective subgrantee has not been audited during the ordinary course of business, in lieu of submitting audited financial statements, it must submit unaudited financial statements from the prior fiscal year and certify that it will provide financial statements from the prior fiscal year that are audited by an independent certified public accountant.F. Required Business Plans and Financial Analysis. Prospective subgrantees shall submit business plans and related analyses that substantiate the sustainability of the proposed project. This can be provided in the form of pro forma statements or analyses, inclusive of cash flow and balance sheet projections and should include at least three years of operating cost and cash flow projections post targeted completion of project. Additionally, prospective subgrantees should provide pertinent resumes of key staff assigned to a proposed project and a matrix illustrating how the skills of lead staff with business plan deliverables. Evaluation of business plans and related analyses will be completed by qualified personnel to ensure there is appropriate capacity and expertise to adequately review the documentation and provide a third-party perspective of the prospective subgrantee. Reviews could include, but not be limited to the following: 1. executive summary assessment2. project description review3. market analysis review4. competitive analysis review5. technical and operational plan review6. risk assessment review7. legal and regulatory compliance8. management team review9. sustainability and environmental impact reviewLa. Admin. Code tit. 4, § XXI-1321
Promulgated by the Office of the Governor, Division of Administration, Office of Broadband Development and Connectivity, LR 50, exp. 7/18/2024(Emergency), Amended LR 50510 (4/1/2024).AUTHORITY NOTE: Promulgated in accordance with R.S. 51:2370.21-2370.33.